<PAGE>
[Pioneer Logo]
Pioneer
Real Estate
Shares
- -------------------------
ANNUAL REPORT 12/31/99
- -------------------------
<PAGE>
Table of Contents
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Letter from the Chairman 1
Portfolio Summary 2
Performance Update 3
Portfolio Management Discussion 7
Schedule of Investments 10
Financial Statements 12
Notes to Financial Statements 20
Report of Independent Public Accountants 25
Trustees, Officers and Service Providers 26
Pioneer Family of Mutual Funds 27
Programs and Services for Pioneer Shareowners 28
</TABLE>
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
LETTER FROM THE CHAIRMAN 12/31/99
- --------------------------------------------------------------------------------
Dear Shareowner,
- --------------------------------------------------------------------------------
In an ever-changing investment environment, it can sometimes be difficult to be
disciplined enough to adhere to your investment goals. We are bombarded every
day with information and advice from a variety of sources. Magazine and
newspaper headlines create a frenzy by shouting - "Top 10 stocks for the year
2000" - sending many investors scrambling to adjust their holdings. But as
history often shows us, yesterday's winners are in no way tomorrow's sure
thing.
We know it's challenging to digest all of this information. But no one can know
with absolute certainty which stocks or bonds will have good performance. It is
important to keep sight of your own investment goals and to stick to them.
Jumping from one investment to another based upon the latest hot trend may not
help you to reach the financial goals for which you are aiming. We think a well
reasoned investment plan will.
The first few months of the year are a practical time to take a step back to
revisit your investment goals and make appropriate adjustments in your personal
portfolio. Scheduling a review session with your financial professional is a
good starting point. A professional acquainted with your individual
circumstances can help you to distill information, examine your current
strategy and make informed decisions that can effectively satisfy your
long-term investment needs.
Among the key topics to cover with your advisor is your retirement - including
the IRA options available to you. Now is the time to think about making a 1999
contribution to an IRA, if you haven't already. This year, you'll have until
April 17 to make your prior-year IRA contribution because April 15 falls on a
Saturday. And, to begin taking advantage of tax-deferred growth, you might want
to get a head start on your year 2000 contribution.
I encourage you to read on to learn more about Pioneer Real Estate Shares. If
you have questions, please contact your investment professional. Visit our web
site at www.pioneerfunds.com for more information about your fund or Pioneer.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President
1
<PAGE>
Pioneer Real Estate Shares
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PORTFOLIO SUMMARY 12/31/99
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Portfolio Diversification
- --------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[Tabular Representation of Pie Chart]
Real Estate Investment Trust Common Stocks 90%
Short-Term Cash Equivalents 4%
Real Estate-Related Common Stocks 6%
[End of Tabular Representation of Pie Chart]
Sector Allocation
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
[Tabular Representation of Pie Chart]
[Begin Pie Chart]
Office/Industrial 29%
Apartments 15%
Hotels 15%
Diverisified 14%
Retail 11%
Storage 5%
Triple-Net 5%
Manufactured Homes 3%
Other 3%
[End of Tabular Representation of Pie Chart]
10 Largest Holdings
- --------------------------------------------------------------------------------
(As a percentage of equity holdings)
<TABLE>
<S> <C> <C> <C>
1. Equity Office Properties 7.31% 6. The Macerich Co. 4.04%
Trust
2. Mack-Cali Realty Corp. 4.84 7. Archstone Communities 3.97
Trust
3. Public Storage, Inc. 4.49 8. Cousins Properties, Inc. 3.85
4. Reckson Associates 4.40 9. Spieker Properties, Inc. 3.70
Realty Corp.
5. Trizec Hahn Corp. 4.22 10. AvalonBay Communities, Inc. 3.66
</TABLE>
Fund holdings will vary for other periods.
2
<PAGE>
Pioneer Real Estate Shares
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PERFORMANCE UPDATE 12/31/99 CLASS A SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 12/31/99 12/31/98
$12.18 $13.46
Distributions per Share Income Short-Term Long-Term
(12/31/98 - 12/31/99)++ Dividends Capital Gains Capital Gains
$0.602 -- --
</TABLE>
++ The Fund also paid non-taxable distributions of $0.048 per share.
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Real Estate Shares at public offering price, compared to the growth
of the Standard & Poor's (S&P) 500 Index and the Wilshire Real Estate
Securities Index.
<TABLE>
<CAPTION>
Average Annual Total Returns
(As of December 31, 1999)
Net Asset Public Offering
Period Value Public
<S> <C> <C>
Life-of-Fund 4.98% 3.98%
(10/25/93)
5 Years 6.97 5.91
1 Year -4.70 -10.18
</TABLE>
[Tabular Representation of Mountain Chart]
* Reflects deduction of the maximum 5.75% sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
Growth of $10,000+
Wilshire
Pioneer Real Estate
Real Estate S&P 500 Securities
Shares* Index Index
10/93 9,425 10,000 10,000
12/93 9,184 10,037 9,553
9,409 9,701 9,884
12/94 9,206 10,175 9,709
9,558 12,225 10,170
12/95 10,321 13,985 11,034
10,858 15,394 12,046
12/96 14,083 17,186 15,103
14,839 20,725 16,088
12/97 16,863 22,914 18,093
15,773 26,965 17,133
12/98 13,528 29,449 14,941
14,191 33,084 15,954
12/99 12,892 35,632 14,464
[End of Tabular Representation of Mountain Chart]
+ Index comparison begins 10/31/93. The S&P 500 Index is an unmanaged measure
of 500 widely held common stocks listed on the New York Stock Exchange,
American Stock Exchange and the over-the-counter market. The Wilshire Real
Estate Securities Index is a market-capitalization weighted measure of the
performance of 120 real estate securities. The Index is 94.0% REITs (equity
and hybrid) and 6.0% real estate operating companies, and its returns are
calculated monthly. Index returns assume reinvestment of dividends and, unlike
Fund returns, do not reflect any fees or expenses. You cannot invest directly
in the Indexes.
Real estate investments may be subject to special risks, including risks
related to general and local economic conditions, and risks related to an
individual property.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
3
<PAGE>
Pioneer Real Estate Shares
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PERFORMANCE UPDATE 12/31/99 CLASS B SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 12/31/99 12/31/98
$12.11 $13.38
Distributions per Share Income Short-Term Long-Term
(12/31/98 - 12/31/99)++ Dividends Capital Gains Capital Gains
$0.494 -- --
</TABLE>
++ The Fund also paid non-taxable distributions of $0.050 per share.
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Real Estate Shares, compared to the growth of the Standard & Poor's
(S&P) 500 Index and the Wilshire Real Estate Securities Index.
<TABLE>
<CAPTION>
Average Annual Total Returns
(As of December 31, 1999)
Period If Held If Redeemed*
<S> <C> <C>
Life-of-Fund 4.91% 4.23%
(1/31/96)
1 Year -5.45 -9.07
</TABLE>
* Reflects deduction of the maximum applicable contingent deferred sales charge
(CDSC) at the end of the period and assumes reinvestment of distributions.
The maximum CDSC of 4% declines over six years.
[Tabular Representation of Mountain Chart]
Growth of $10,000
<TABLE>
<CAPTION>
Wilshire
Pioneer Real
Real S&P Estate
Estate 500 Securities
Shares* Index Index
<S> <C> <C> <C>
1/96 10,000 10,000 10,000
10,108 10,203 10,281
6/96 10,427 10,660 10,768
11,555 10,987 11,404
12/96 13,481 11,902 13,501
13,628 12,223 13,749
6/97 14,156 14,352 14,381
16,260 15,426 16,198
12/9 16,023 15,868 16,174
15,872 18,076 16,052
6/98 14,945 18,673 15,315
12,844 16,818 13,484
12/98 12,761 20,393 13,356
11,903 21,407 12,893
6/99 13,329 22,910 14,261
12,174 21,482 12,900
12/99 11,765 24,675 12,930
</TABLE>
[End of Tabular Representation of Mountain Chart]
The S&P 500 Index is an unmanaged measure of 500 widely held common stocks
listed on the New York Stock Exchange, American Stock Exchange and the
over-the-counter market. The Wilshire Real Estate Securities Index is a
market-capitalization weighted measure of the performance of 120 real estate
securities. The Index is 94.0% REITs (equity and hybrid) and 6.0% real estate
operating companies, and its returns are calculated monthly. Index returns
assume reinvestment of dividends and, unlike Fund returns, do not reflect any
fees or expenses. You cannot invest directly in the Indexes.
Real estate investments may be subject to special risks, including risks
related to general and local economic conditions, and risks related to an
individual property.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
4
<PAGE>
Pioneer Real Estate Shares
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PERFORMANCE UPDATE 12/31/99 CLASS C SHARES
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Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 12/31/99 12/31/98
$12.12 $13.37
Distributions per Share Income Short-Term Long-Term
(12/31/98 - 12/31/99)++ Dividends Capital Gains Capital Gains
$0.481 -- --
</TABLE>
++ The Fund also paid non-taxable distributions of $0.047 per share.
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Real Estate Shares, compared to the growth of the Standard & Poor's
(S&P) 500 Index and the Wilshire Real Estate Securities Index.
<TABLE>
<CAPTION>
Average Annual Total Returns
(As of December 31, 1999)
Period If Held If Redeemed*
<S> <C> <C>
Life-of-Fund 4.90% 4.90%
(1/31/96)
1 Year -5.41 -5.41
</TABLE>
* Assumes reinvestment of distributions. The 1% contingent deferred sales
charge (CDSC) applies to redemptions made within one year of purchase.
[Tabular Representation of Mountain Chart]
<TABLE>
<CAPTION>
Wilshire
Pioneer Real
Real S&P Estate
Estate 500 Securities
Shares* Index Index
<S> <C> <C> <C>
1/96 10,000 10,000 10,000
10,108 10,203 10,281
6/96 10,418 10,660 10,768
11,545 10,987 11,404
12/96 13,476 11,902 13,501
13,613 12,223 13,749
6/97 14,150 14,352 14,381
16,252 15,426 16,198
12/97 16,019 15,868 16,174
15,867 18,076 16,052
6/98 14,941 18,673 15,315
12,840 16,818 13,484
12/98 12,754 20,393 13,365
11,897 21,407 12,893
6/99 13,312 22,910 14,261
12,158 21,482 12,900
12/99 12,064 24,675 12,930
</TABLE>
[End of Tabular Representation of Mountain Chart]
The S&P 500 Index is an unmanaged measure of 500 widely held common stocks
listed on the New York Stock Exchange, American Stock Exchange and the
over-the-counter market. The Wilshire Real Estate Securities Index is a
market-capitalization weighted measure of the performance of 120 real estate
securities. The Index is 94.0% REITs (equity and hybrid) and 6.0% real estate
operating companies, and its returns are calculated monthly. Index returns
assume reinvestment of dividends and, unlike Fund returns, do not reflect any
fees or expenses. You cannot invest directly in the Indexes.
Real estate investments may be subject to special risks, including risks
related to general and local economic conditions, and risks related to an
individual property.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost.
5
<PAGE>
Pioneer Real Estate Shares
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PERFORMANCE UPDATE 12/31/99 CLASS Y SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Net Asset Value
per Share 12/31/99 12/31/98
$12.16 $13.46
Distributions per Share Income Short-Term Long-Term
(12/31/98 - 12/31/99)++ Dividends Capital Gains Capital Gains
$0.698 -- --
</TABLE>
++ The Fund also paid non-taxable distributions of $0.052 per share.
Investment Returns
- --------------------------------------------------------------------------------
The mountain chart on the right shows the growth of a $10,000 investment made
in Pioneer Real Estate Shares, compared to the growth of the Standard & Poor's
(S&P) 500 Index and the Wilshire Real Estate Securities Index.
<TABLE>
<CAPTION>
Average Annual Total Returns*
(As of December 31, 1999)
Period If Held If Redeemed
<S> <C> <C>
Life-of-Fund -13.45% -13.45%
(4/9/98)
1 Year -4.10 -4.10
</TABLE>
* Assumes reinvestment of distributions.
[Tabular Representation of Mountain Chart]
Growth of $10,000+
<TABLE>
<CAPTION>
Wilshire
Pioneer Real
Real S&P Estate
Estate 500 Securities
Shares* Index Index
<S> <C> <C> <C>
4/98 10,000 10,000 10,000
9,929 9,812 9,904
6/98 9,720 10,237 9,852
9,121 10,118 9,166
8,011 8,643 8,214
9/98 8,383 9,220 8,673
8,227 9,961 8,555
8,299 10,549 8,715
12/98 8,361 11,180 8,591
8,106 11,639 8,404
8,063 11,263 8,338
3/99 7,828 11,736 8,293
8,741 12,180 9,177
8,967 11,876 9,332
6/99 8,791 12,560 9,173
8,453 12,158 8,822
8,389 12,081 8,690
9/99 8,059 11,777 8,298
7,813 12,513 8,144
7,755 12,752 8,016
12/99 8,018 13,527 8,317
</TABLE>
[End of Tabular Representation of Mountain Chart]
+ Index comparison begins 4/30/98. The S&P 500 Index is an unmanaged measure of
500 widely held common stocks listed on the New York Stock Exchange,
American Stock Exchange and the over-the-counter market. The Wilshire Real
Estate Securities Index is a market-capitalization weighted measure of the
performance of 120 real estate securities. The Index is 94% REITs (equity
and hybrid) and 6% real estate operating companies, and its returns are
calculated monthly. Index returns assume reinvestment of dividends and,
unlike Fund returns, do not reflect any fees or expenses. You cannot invest
directly in the Indexes.
Real estate investments may be subject to special risks, including risks
related to general and local economic conditions, and risks related to an
individual property.
Past performance does not guarantee future results. Return and share price
fluctuate, and your shares, when redeemed, may be worth more or less than
their original cost.
6
<PAGE>
Pioneer Real Estate Shares
- -------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 12/31/99
- -------------------------------------------------------------------------------
In a year that will be remembered for the record-breaking success of technology
and telecommunications stocks, it comes as no surprise that less prominent
sectors of the economy turned in lackluster performance. Real estate
investments sat in the shadows of these stellar performers for much of 1999,
but we believe there is the prospect for better days ahead. A happy confluence
of factors is setting the stage for the potential for solid growth - possibly
with significantly less volatility than in the past. In the following
interview, portfolio manager Matthew Ostrower explains the factors affecting
Pioneer Real Estate Shares' performance during the last 12 months.
Q: Did real estate investments go the way of other out-of-favor stocks during
the 12 months ending December 31?
A: Yes. Despite some very positive developments, including low vacancy rates
and rising rents and property prices, investments in the commercial real
estate market turned in sub-par performance during 1999. The fourth quarter
was particularly difficult for the sector, as investors sought to realize
tax losses through the sale of larger, more widely held real-estate
companies to offset tax gains resulting from the sale of investments with
strong price appreciation. For your Fund, however, effective stock picking
and strategic sector allocations eased these market pressures. For the
period, Class A, B and C shares generated total returns of -4.70%, -5.45%
and -5.41%, respectively, at net asset value. In comparison, the Wilshire
Real Estate Securities Index posted a return of -3.19% for the same period.
The 134 real estate funds tracked by Lipper, Inc. retreated, on average,
-3.29% for the same period. (Lipper is an independent firm that measures
mutual fund performance.)
Q: Is this performance masking positive developments that bode well for the
sector's future?
A: Absolutely. Today, the real estate market is healthier than it has been in a
long time. Unlike the late 1980s and early 1990s, when overzealous lending
led to overbuilding, the supply and demand of new properties is now
balanced. This equilibrium is the product of cautious lending practices,
which make construction financing harder and more expensive to acquire.
Furthermore, the global credit crunch, brought on by Russia's
7
<PAGE>
Pioneer Real Estate Shares
- -------------------------------------------------------------------------------
PORTFOLIO MANAGEMENT DISCUSSION 12/31/99 (continued)
- -------------------------------------------------------------------------------
default in the later part of 1998, led banks to require developers to lease
buildings before they would provide financing for a project.
The industry is also benefiting from a wider range of information than was
available 10 years ago. During the 1990s, the rising market capitalization
of real-estate investment trusts (REITs) prompted Wall Street to hire REIT
analysts to follow the companies. Their research is helping lenders and
investors alike make better informed decisions. If a market such as Dallas
show signs of overbuilding, for instance, lenders may scale back a project
or scrap it entirely.
Q: How did you manage the Fund during the year?
A: Our sector decisions were instrumental. The various sectors that the real
estate industry comprises have their own growth cycles, so it becomes very
important to determine which ones offer the best opportunities for our
shareowners. Our decision to invest heavily in apartments and office space
proved very positive for the Fund, since they turned in the best
comparative performance for the year ending December 31. With rents hitting
historical highs and supply/demand dynamics in balance, the apartment
sector currently is very profitable. We've focused on companies with
exposure to markets with less new supply, such as Home Properties of New
York, which owns apartments around New England. California-based Essex
Property is benefiting from a strong local economy and limited new
construction.
Office REITs represent the largest sector weighting. Demand for office towers
is at an all time high, thanks in no small part to a 10-year economic
expansion and the rise of internet-related companies looking to lease huge
amounts of space. Aggressive and entrepreneurial, Reckson Associates Realty
epitomizes the best in the sector, with an attractive portfolio of
buildings in greater New York City and northern New Jersey.
On the other hand, the Fund has very limited assets invested in hotel and
retail REITs. Hotels are suffering from overbuilding in some locations. We
steadily sold off less desirable assets during the course of the year and
now currently own just two well located, luxury hotels - Host Marriott and
Starwood Hotels & Resorts. We also avoided community shopping mall REITs
for the most part, since the group as a whole is lacking in high-quality
companies with strong
8
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
management teams. However, we are more optimistic about regional shopping
malls, including Developers Diversified Realty, which owns retail
properties across the nation.
Q: Quality is obviously a big theme for you. Are you also focused on improving
the Fund's yield?
A: Income is an important component of our strategy, and we've found some very
attractive opportunities. However, I must reiterate that quality is an
overriding consideration in every investment decision we make.
Higher-caliber, well managed real estate companies are in the best position
to grow more dramatically when new opportunities emerge. They are also more
likely to receive greater consideration by lenders when construction
financing is limited.
The final months of 1999 - when tax selling was at its height - tested our
dedication to quality. We avoided the temptation to move out of
higher-quality companies that were experiencing selling pressure, believing
it was a temporary market phenomenon that did not reflect the true
fundamentals of the underlying companies. If we'd succumbed to such
pressures, we might have helped our performance a tiny bit in the short
run. However, the Fund, and ultimately our shareholders, would have
incurred increased trading costs. That's not prudent management in our
book.
Q: What is your outlook?
A: I'm upbeat about prospects for REITs. Most are trading well below our
estimate of their underlying real estate asset values, creating attractive
buying opportunities. REIT balance sheets are also in the best condition in
years. As always, the Fund is subject to risks similar to those associated
with the direct ownership of real estate, including changing general and
local economic, financial, competitive and environmental conditions.
However, for value-oriented investors with an appreciation of growth
strategies, it's a great time to gain exposure to a sector of the stock
market that historically has moved independently of other asset classes.
9
<PAGE>
Pioneer Real Estate Shares
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- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS 12/31/99
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 96.1%
Real Estate Investment Trusts - 90.1%
150,100 Archstone Communities Trust $ 3,077,050
82,700 AvalonBay Communities, Inc. 2,837,644
43,500 Boston Properties, Inc. 1,353,938
82,700 Brandywine Realty Trust 1,354,212
85,700 Burnham Pacific Property, Inc. 803,437
85,300 Camden Property Trust 2,335,088
57,000 Charles E. Smith Residential Realty, Inc. 2,016,375
7,000 Corporate Office Properties Trust 53,375
88,100 Cousins Properties, Inc. 2,989,894
53,300 Crescent Real Estate Equities, Inc. 979,387
218,400 Developers Diversified Realty Corp. 2,811,900
145,400 Duke-Weeks Realty Corp. 2,835,300
38,300 Entertainment Properties Trust 505,081
230,182 Equity Office Properties Trust 5,668,232
61,900 Equity Residential Property Trust 2,642,356
77,000 Essex Property Trust, Inc. 2,618,000
84,100 Franchise Finance Corporation of America 2,013,144
40,700 General Growth Properties, Inc. 1,139,600
57,900 Highwoods Properties, Inc. 1,346,175
85,200 Home Properties of New York, Inc. 2,337,675
164,350 Host Marriott Corp. 1,355,888
150,500 The Macerich Co. 3,132,281
144,200 Mack-Cali Realty Corp. 3,758,213
163,100 Mission West Properties, Inc. 1,264,025
40,000 Pacific Gulf Properties, Inc. 810,000
55,700 Parkway Properties, Inc. 1,604,856
22,500 Philips International Realty Corp. 369,844
127,600 Prentiss Properties Trust 2,679,600
153,600 Public Storage, Inc. 3,484,800
166,500 Reckson Associates Realty Corp. 3,413,250
65,600 Simon Property Group, Inc. 1,504,700
78,700 Spieker Properties, Inc. 2,867,631
117,900 Starwood Hotels & Resorts Trust 2,770,650
61,000 Vornado Realty Trust 1,982,500
-----------
Total Real Estate Investment Trusts $72,716,101
-----------
</TABLE>
10 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
Real Estate Services - 6.0%
123,600 Catellus Development Corp.* $ 1,583,624
194,000 Trizec Hahn Corp. 3,273,750
-----------
Total Real Estate Services $ 4,857,374
-----------
TOTAL INVESTMENT IN SECURITIES
(Cost $79,100,397) $77,573,475
-----------
Principal
Amount
TEMPORARY CASH INVESTMENT - 3.9%
Commercial Paper - 3.9%
$3,151,000 American Express Credit Corp., 4.25%, 1/3/00 $ 3,151,000
-----------
TOTAL TEMPORARY CASH INVESTMENT
(Cost $3,151,000) $ 3,151,000
-----------
TOTAL INVESTMENT IN SECURITIES AND
TEMPORARY CASH INVESTMENT - 100%
(Cost $82,251,397) (a)(b) $80,724,475
===========
</TABLE>
* Non-income producing security.
(a) At December 31, 1999, the net unrealized loss on investments based on cost
for federal income tax purposes of $83,516,296 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized gain for all investments in which
there is an excess of value over tax cost $ 4,517,746
Aggregate gross unrealized loss for all investments in which
there is an excess of tax cost over value (7,309,567)
------------
Net unrealized loss $ (2,791,821)
============
</TABLE>
(b) At December 31, 1999, the Fund had a net capital loss carryforward of
$15,366,574 which will expire in 2007 if not utilized.
Purchases and sales of securities (excluding temporary cash investments) for
the year ended December 31, 1999 aggregated $41,414,481 and $88,351,930,
respectively.
The accompanying notes are an integral part of these financial statements. 11
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
BALANCE SHEET 12/31/99
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (including temporary cash investment
of $3,151,000) (cost $82,251,397) $80,724,475
Cash 971
Receivables -
Investment securities sold 32,974
Fund shares sold 103,618
Dividends and interest 731,826
Other 2,726
-----------
Total assets $81,596,590
-----------
LIABILITIES:
Payables -
Investment securities purchased $ 26,206
Fund shares repurchased 656,291
Due to affiliates 153,672
Accrued expenses 105,192
-----------
Total liabilities $ 941,361
-----------
NET ASSETS:
Paid-in capital $99,221,749
Accumulated net realized loss on investments (17,039,598)
Net unrealized loss on investments (1,526,922)
-----------
Total net assets $80,655,229
-----------
NET ASSET VALUE PER SHARE:
(Unlimited number of shares authorized)
Class A (based on $40,113,142/3,293,333 shares) $ 12.18
===========
Class B (based on $33,068,679/2,729,572 shares) $ 12.11
===========
Class C (based on $6,565,912/541,902 shares) $ 12.12
===========
Class Y (based on $907,496/74,652 shares) $ 12.16
===========
MAXIMUM OFFERING PRICE:
Class A $ 12.92
===========
</TABLE>
12 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Year Ended 12/31/99
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Dividends (net of foreign taxes withheld of $12,345) $6,588,158
Interest 55,941
----------
Total investment income $ 6,644,099
------------
EXPENSES:
Management fees $1,079,759
Transfer agent fees
Class A 205,438
Class B 165,798
Class C 42,563
Class Y 265
Distribution fees
Class A 125,807
Class B 436,918
Class C 94,462
Administrative fees 3,932
Custodian fees 41,232
Registration fees 54,991
Professional fees 50,045
Printing 38,943
Fees and expenses of nonaffiliated trustees 19,890
Miscellaneous 14,327
----------
Total expenses $ 2,374,370
Less management fees waived by Pioneer
Investment Management, Inc. (152,097)
Less fees paid indirectly (10,761)
------------
Net expenses $ 2,211,512
------------
Net investment income $ 4,432,587
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments $(17,501,018)
Change in net unrealized loss on investments 6,933,707
------------
Net loss on investments $(10,507,311)
------------
Net decrease in net assets resulting from operations $ (6,074,724)
============
</TABLE>
The accompanying notes are an integral part of these financial statements. 13
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
For the Years Ended 12/31/99 and 12/31/98
<TABLE>
<CAPTION>
Year Ended Year Ended
<S> <C> <C>
FROM OPERATIONS: 12/31/99 12/31/98
Net investment income $ 4,432,587 $ 5,645,694
Net realized gain (loss) on investments (17,501,018) 2,677,399
Change in net unrealized gain or loss on investments 6,993,707 (50,906,919)
------------ ------------
Net decrease in net assets resulting from
operations $ (6,074,724) $(42,583,826)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ($0.60 and $0.51 per share, respectively) $ (2,343,384) $ (2,854,293)
Class B ($0.49 and $0.42 per share, respectively) (1,575,423) (1,878,714)
Class C ($0.48 and $0.42 per share, respectively) (318,887) (480,177)
Class Y ($0.70 and $0.44 per share, respectively) (54,605) (46,919)
Net realized gain:
Class A ($0.00 and $0.27 per share, respectively) - (1,358,104)
Class B ($0.00 and $0.27 per share, respectively) - (1,129,556)
Class C ($0.00 and $0.27 per share, respectively) - (261,168)
Class Y ($0.00 and $0.27 per share, respectively) (26,854)
Tax return of capital:
Class A ($0.05 and $0.08 per share, respectively) (182,770) (458,088)
Class B ($0.05 and $0.05 per share, respectively) (145,798) (217,538)
Class C ($0.05 and $0.05 per share, respectively) (30,935) (55,170)
Class Y ($0.05 ans $0.06 per share, respectively) (3,998) (6,641)
------------ ------------
Total distributions to shareholders $ (4,655,800) $ (8,773,222)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Net proceeds from sale of shares $ 16,875,294 $ 42,387,508
Reinvestment of distributions 3,580,646 6,654,714
Cost of shares repurchased (66,192,745) (83,257,141)
------------ ------------
Net decrease in net assets resulting from fund
share transactions $(45,736,805) $(34,214,919)
------------ ------------
Net decrease in net assets $(56,467,329) $(85,571,967)
NET ASSETS:
Beginning of year 137,122,558 222,694,525
------------ ------------
End of year (including accumulated undistributed net
investment income of $0 and $349,899, respectively) $ 80,655,229 $137,122,558
============ ============
</TABLE>
14 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
'99 Shares '99 Amount '98 Shares '98 Amount
<S> <C> <C> <C> <C>
CLASS A
Shares sold 623,783 $ 8,422,575 1,181,291 $ 19,016,383
Reinvestment of distributions 173,426 2,171,157 279,733 4,023,577
Less shares repurchased (2,526,596) (32,864,849) (2,940,201) (45,729,358)
---------- ------------ ---------- ------------
Net decrease (1,729,387) $(22,271,117) (1,479,177) $(22,689,398)
========== ============ ========== ============
CLASS B
Shares sold 527,672 $ 6,976,256 1,004,622 $ 16,386,086
Reinvestment of distributions 89,725 1,114,430 144,220 2,032,031
Less shares repurchased (2,027,763) (25,979,704) (1,680,658) (25,450,815)
---------- ------------ ---------- ------------
Net decrease (1,410,366) $(17,889,018) (531,816) $ (7,032,698)
========== ============ ========== ============
CLASS C
Shares sold 94,553 $ 1,241,257 308,128 $ 4,957,748
Reinvestment of distributions 19,047 236,429 36,667 518,692
Less shares repurchased (523,887) (6,726,348) (761,505) (11,790,559)
---------- ------------ ---------- ------------
Net decrease (410,287) $ (5,248,662) (416,710) $ (6,314,119)
========== ============ ========== ============
CLASS Y*
Shares sold 17,906 $ 235,206 116,914 $ 2,027,291
Reinvestment of distributions 4,710 58,630 5,786 80,414
Less shares repurchased (49,137) (621,844) (21,527) (286,409)
---------- ------------ ---------- ------------
Net increase (decrease) (26,521) $ (328,008) 101,173 $ 1,821,296
========== ============ ========== ============
</TABLE>
*Class Y shares were first publicly offered on April 9, 1998.
The accompanying notes are an integral part of these financial statements. 15
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/99
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
CLASS A 12/31/99 12/31/98 12/31/97 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 13.46 $ 17.81 $ 15.52 $ 12.02 $ 11.38
------- -------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.65 $ 0.56 $ 0.41 $ 0.42 $ 0.32
Net realized and unrealized gain (loss) on investments ( 1.28) (4.05) 2.61 3.82 1.01
------- -------- ------- ------- -------
Net increase (decrease) from investment operations $ (0.63) $ (3.49) $ 3.02 $ 4.24 $ 1.33
Distributions to shareholders:
Net investment income (0.60) (0.51) (0.36) (0.40) (0.33)
In excess of net investment income - - - - (0.02)
Net realized gain - (0.27) (0.23) (0.34) -
Tax return of capital (0.05) (0.08) (0.14) - (0.34)
------- -------- -------- ------- -------
Net increase (decrease) in net asset value $ (1.28) $ (4.35) $ 2.29 $ 3.50 $ 0.64
------- -------- -------- ------ -------
Net asset value, end of year $ 12.18 $ 13.46 $ 17.81 $15.52 $ 12.02
======= ======== ======== ====== =======
Total return* (4.70)% (19.77)% 19.74% 36.45% 12.11%
Ratio of net expenses to average net assets + 1.69% 1.69% 1.65% 1.71% 1.77%
Ratio of net investment income to average net assets + 4.45% 3.29% 2.51% 3.52% 2.73%
Portfolio turnover rate 39% 11% 28% 47% 10%
Net assets, end of year (in thousands) $40,113 $ 67,619 $115,772 $72,572 $27,491
Ratios assuming no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 1.83% 1.69% 1.65% 2.09% 2.59%
Net investment income 4.31% 3.29% 2.51% 3.14% 1.91%
Ratios assuming waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses 1.67% 1.67% 1.63% 1.69% 1.75%
Net investment income 4.47% 3.31% 2.53% 3.54% 2.75%
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratios assuming no reduction for fees paid indirectly.
16 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/99
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended 1/31/96 to
CLASS B 12/31/99 12/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.38 $ 17.70 $ 15.45 $ 12.09
------- -------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.52 $ 0.45 $ 0.28 $ 0.35
Net realized and unrealized gain (loss) on investments (1.25) (4.03) 2.60 3.73
------- -------- ------- -------
Net increase (decrease) from investment operations $ (0.73) $ (3.58) $ 2.88 $ 4.08
Distributions to shareholders:
Net investment income (0.49) (0.42) (0.29) (0.35)
In excess of net investment income - - - (0.03)
Net realized gain - (0.27) (0.23) (0.34)
Tax return of capital (0.05) (0.05) (0.11) -
------- -------- ------- -------
Net increase (decrease) in net asset value $ (1.27) $ (4.32) $ 2.25 $ 3.36
------- -------- ------- -------
Net asset value, end of period $ 12.11 $ 13.38 $ 17.70 $ 15.45
======= ======== ======= =======
Total return* (5.45)% (20.36)% 18.85% 34.81%
Ratio of net expenses to average net assets + 2.45% 2.45% 2.39% 2.33%**
Ratio of net investment income to average net assets + 3.75% 2.77% 1.82% 3.73%**
Portfolio turnover rate 39% 11% 28% 47%
Net assets, end of period (in thousands) $33,069 $ 55,407 $82,695 $ 26,379
Ratios assuming no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 2.59% 2.45% 2.39% 2.45%**
Net investment income 3.61% 2.77% 1.82% 3.61%**
Ratios assuming waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses 2.44% 2.44% 2.36% 2.30%**
Net investment income 3.76% 2.78% 1.85% 3.76%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 17
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/99
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended 1/31/96 to
CLASS C 12/31/99 12/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 13.37 $ 17.70 $ 15.46 $ 12.09
------- -------- ------- -------
Increase (decrease) from investment operations:
Net investment income $ 0.52 $ 0.45 $ 0.29 $ 0.34
Net realized and unrealized gain (loss) on investments (1.24) (4.04) 2.59 3.73
------- -------- ------- -------
Net increase (decrease) from investment operations $ (0.72) $ (3.59) $ 2.88 $ 4.07
Distributions to shareholders:
Net investment income (0.48) (0.42) (0.30) (0.34)
In excess of net investment income - - - (0.02)
Net realized gain - (0.27) (0.23) (0.34)
Tax return of capital (0.05) (0.05) (0.11) -
------- -------- ------- --------
Net increase (decrease) in net asset value $ (1.25) $ (4.33) $ 2.24 $ 3.37
------- -------- ------- --------
Net asset value, end of period $ 12.12 $ 13.37 $ 17.70 $ 15.46
======= ======== ======= ========
Total return* (5.41)% (20.38)% 18.86% 34.76 %
Ratio of net expenses to average net assets + 2.52% 2.41% 2.35% 2.35%**
Ratio of net investment income to average net assets + 3.63% 2.67% 1.88% 3.66%**
Portfolio turnover rate 39% 11% 28% 47%
Net assets, end of period (in thousands) $ 6,566 $ 12,735 $24,227 $ 6,699
Ratios assuming no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses 2.66% 2.41% 2.35% 2.48%**
Net investment income 3.49% 2.67% 1.88% 3.53%**
Ratios assuming waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses 2.51% 2.40% 2.32% 2.32%**
Net investment income 3.64% 2.68% 1.91% 3.69%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
18 The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS 12/31/99
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended 4/9/98 to
12/31/99 12/31/98
<S> <C> <C>
CLASS Y
Net asset value, beginning of period $13.46 $17.52
------- --------
Increase (decrease) from investment operations:
Net investment income $ 0.70 $ 0.47
Net realized and unrealized loss on investments (1.25) (3.76)
------- ---------
Net decrease from investment operations $(0.55) $(3.29)
Distributions to shareholders:
Net investment income (0.70) (0.44)
Net realized gain - (0.27)
Tax return of capital (0.05) (0.06)
------- ---------
Net decrease in net asset value $(1.30) $(4.06)
------- ---------
Net asset value, end of period $12.16 $13.46
======= ========
Total return* (4.10)% (18.78)%
Ratio of net expenses to average net assets + 1.01% 1.21%**
Ratio of net investment income to average net assets + 5.14% 4.31%**
Portfolio turnover rate 39% 11%
Net assets, end of period (in thousands) $ 907 $1,362
Ratios assuming no waiver of management fees by PIM
and no reduction for fees paid indirectly:
Net expenses 1.24% _
Net investment income 5.00% _
Ratios assuming waiver of management fees by PIM and
reduction for fees paid indirectly:
Net expenses 1.10% 1.21%**
Net investment income 5.14% 4.31%**
</TABLE>
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, and the complete redemption of
the investment at net asset value at the end of each period.
** Annualized.
+ Ratios assuming no reduction for fees paid indirectly.
The accompanying notes are an integral part of these financial statements. 19
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/99
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies
Pioneer Real Estate Shares (the Fund) is a Delaware business trust registered
under the Investment Company Act of 1940 as a non-diversified, open-end
management investment company. The investment objective of the Fund is to seek
long-term growth of capital. Current income is a secondary objective.
The Fund offers four classes of shares--Class A, Class B, Class C, and Class Y
shares. Each class of shares represents an interest in the same portfolio of
investments of the Fund and has equal rights to voting, redemptions, dividends
and liquidation, except that the level of transfer agent and distribution fees
may differ among classes. Class A, Class B and Class C shareholders have
exclusive voting rights with respect to the distribution plan for each class.
There is no distribution plan for Class Y shares.
The Fund's financial statements have been prepared in conformity with generally
accepted accounting principles that require the management of the Fund to,
among other things, make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts
of revenues and expenses during the reporting periods. Actual results could
differ from those estimates. The following is a summary of significant
accounting policies consistently followed by the Fund, which are in conformity
with those generally accepted in the investment company industry.
A. Security Valuation
Security transactions are recorded on trade date. The net asset value is
computed once daily, on each day the New York Stock Exchange is open, as of
the close of regular trading on the Exchange. In computing the net asset
value, securities are valued at the last sale price on the principal
exchange where they are traded. Securities that have not traded on the date
of valuation, or securities for which sale prices are not generally
reported, are valued at the mean between the last bid and asked prices.
Securities for which market quotations are not readily available are valued
at their fair values as determined by, or under the direction of, the Board
of Trustees. Dividend income is recorded on the ex-dividend date and
interest income is recorded on the accrual basis. Temporary cash
investments are valued at amortized cost.
20
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Because the Fund may invest a substantial portion of its assets in Real
Estate Investment Trusts (REITs), the Fund may be subject to certain risks
associated with direct investments in REITs. REITs may be affected by
changes in the value of their underlying properties and by defaults by
borrowers or tenants. REITs depend generally on their ability to generate
cash flow to make distributions to shareholders, and certain REITs have
self-liquidation provisions by which mortgages held may be paid in full and
distributions of capital returns may be made at any time. In addition, the
performance of a REIT may be affected by its failure to qualify for
tax-free pass-through of income under the Internal Revenue Code or its
failure to maintain exemption from registration under the Investment
Company Act of 1940.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
It is the Fund's practice to first select for sale those securities that
have the highest cost and also qualify for long-term capital gain or loss
treatment for tax purposes.
B. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareholders. Therefore, no federal income tax provision is required.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax
rules. Therefore, the source of the Fund's distributions may be shown in
the accompanying financial statements as either from or in excess of net
investment income or net realized gain on investment transactions, or from
paid-in capital, depending on the type of book/tax differences that may
exist.
A portion of the dividend income recorded by the Fund is from distributions
by publicly traded REITs, and such distributions for tax purposes may also
consist of capital gains and return of capital. The actual return of
capital and capital gains portions of such distributions will be determined
by formal notifications from the REITs subsequent to the calendar year-end.
Distributions received from the REITs that are determined to be a return of
capital, are recorded by the Fund as a reduction of the cost basis of the
securities held.
21
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/99 (continued)
- --------------------------------------------------------------------------------
At December 31, 1999, the Fund reclassified $461,420 and $28,767
from accumulated undistributed net investment income to accumulated
net realized loss on investments and paid-in capital, respectively. The
reclassifications has no impact on the net asset value of the Fund and is
designed to present the Fund's capital accounts on a tax basis.
C. Fund Shares
The Fund records sales and repurchases of its shares on trade date. Net
losses, if any, as a result of cancellations are absorbed by Pioneer Funds
Distributor, Inc. (PFD), the principal underwriter for the Fund and an
indirect subsidiary of The Pioneer Group, Inc. (PGI). PFD earned $12,473 in
underwriting commissions on the sale of fund shares during the year ended
December 31, 1999.
D. Class Allocations
Distribution fees are calculated based on the average daily net asset value
attributable to Class A, Class B and Class C shares of the Fund,
respectively. Class Y shares are not subject to a distribution plan.
Shareholders of each class share all expenses and fees paid to the transfer
agent, Pioneering Services Corporation (PSC), for their services, which are
allocated based on the number of accounts in each class and the ratable
allocation of related out-of-pocket expense (see Note 3 ). Income, common
expenses and realized and unrealized gains and losses are calculated at the
Fund level and allocated daily to all classes of shares based on their
respective percentage of adjusted net assets at the beginning of the day.
Distributions to shareholders are recorded as of the ex-dividend date.
Distributions paid by the Fund with respect to each class of shares are
calculated in the same manner, at the same time, and in the same amount,
except that Class A, Class B, Class C and Class Y can bear different
transfer agent and distribution fees.
2. Management Agreement
Pioneer Investment Management, Inc. (PIM), the Fund's investment adviser,
manages the Fund's portfolio and is a wholly owned subsidiary of PGI. Management
fees are calculated daily at the annual rate of 1.00% of the Fund's average
daily net assets. PIM had appointed Boston Financial Securities, Inc. (BFS) as
the Fund's subadviser. As compensation for its subadvisory services, PIM paid
BFS a management fee at the annual rate of 0.25% of the Fund's average daily net
assets up to $27 million and 0.50% of excess over $27 million. This agreement
has been terminated effective November 3, 1999. Effective April 1, 1999, PIM has
agreed not to impose a portion of its management fee to the extent necessary to
reduce the fee from 1.00% to 0.80% of the Fund's average daily net assets. This
agreement is voluntary and temporary and may be revised or terminated at any
time.
22
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
In addition, under the management and administration agreements, certain other
services and costs, including accounting, regulatory reporting and insurance
premiums, are paid by the Fund. At December 31, 1999, $57,400 was payable to
PIM related to management fees, administrative fees and certain other services.
3. Transfer Agent
Pioneering Services Corporation (PSC), a wholly owned subsidiary of PGI,
provides substantially all transfer agent and shareholder services to the Fund
at negotiated rates. Included in due to affiliates is $52,059 in transfer agent
fees payable to PSC at December 31, 1999.
4. Distribution Plans
The Fund adopted Plans of Distribution with respect to Class A, Class B and
Class C shares (Class A Plan, Class B Plan and Class C Plan) in accordance with
Rule 12b-1 of the Investment Company Act of 1940. Pursuant to the Class A Plan,
the Fund pays PFD a service fee of up to 0.25% of the average daily net assets
attributable to Class A shares in reimbursement of its actual expenditures to
finance activities primarily intended to result in the sale of Class A shares.
Pursuant to the Class B Plan and the Class C Plan, the Fund pays PFD 1.00% of
the average daily net assets attributable to each class of shares. The fee
consists of a 0.25% service fee and a 0.75% distribution fee paid as
compensation for personal services and/or account maintenance services or
distribution services with regard to Class B and Class C shares. Included in
due to affiliates is $44,213 in distribution fees payable to PFD at December
31, 1999.
In addition, redemptions of each class of shares (except Class Y shares) may be
subject to a contingent deferred sales charge (CDSC). A CDSC of 1.00% may be
imposed on redemptions of certain net asset value purchases of Class A shares
within one year of purchase. Class B shares that are redeemed within six years
of purchase are subject to a CDSC at declining rates beginning at 4.00%, based
on the lower of cost or market value of shares being redeemed. Redemptions of
Class C shares within one year of purchase are subject to a CDSC of 1.00%.
Proceeds from the CDSCs are paid to PFD. For the year ended December 31, 1999,
CDSCs in the amount of $338,174 were paid to PFD.
5. Expense Offsets
The Fund has entered into certain expense offset arrangements resulting in a
reduction in the Fund's total expenses. For the year ended December 31, 1999,
the Fund's expenses were reduced by $10,761 under such arrangements.
23
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 12/31/99 (continued)
- --------------------------------------------------------------------------------
6. Line of Credit Facility
The Fund along with certain other funds in the Pioneer Family of Funds (the
Funds) collectively participate in a $50 million committed, unsecured revolving
line of credit facility. Borrowings are used solely for temporary or emergency
purposes. The Fund may borrow up to the lesser of $50 million or the limits set
by its prospectus for borrowings. Interest on collective borrowings of up to
$25 million is payable at the Federal Funds Rate plus 3/8% on an annualized
basis, or at the Federal Funds Rate plus 1/2% if the borrowing exceeds $25
million at any one time. The Funds pay an annual commitment fee for this
facility. The commitment fee is allocated among such Funds based on their
respective borrowing limits.
The average daily amount of borrowings outstanding during the year ended
December 31, 1999, was $27,030. The average daily shares outstanding during the
year were 8,284,747 resulting in an average borrowing of less than one cent per
share. The related weighted average annualized interest rate for the year was
5.5%, and the total interest expense on such borrowings was $2,667.
24
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareowners and the Board of Trustees of Pioneer Real Estate Shares:
We have audited the accompanying balance sheet, including the schedule of
investments, of Pioneer Real Estate Shares as of December 31, 1999, and the
related statement of operations, the statements of changes in net assets, and
the financial highlights for the periods presented. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1999, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer Real Estate Shares as of December 31, 1999, the results of its
operations, the changes in its net assets, and the financial highlights for the
periods presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 4, 2000
25
<PAGE>
Pioneer Real Estate Shares
- --------------------------------------------------------------------------------
TRUSTEES, OFFICERS AND SERVICE PROVIDERS
- --------------------------------------------------------------------------------
Trustees Officers
John F. Cogan, Jr. John F. Cogan, Jr., Chairman and
Mary K. Bush President
Blake Eagle David D. Tripple, Executive Vice
Richard H. Egdahl, M.D. President
Margaret B.W. Graham Stephen G. Kasnet, Vice President
Stephen G. Kasnet Eric W. Reckard, Treasurer
John W. Kendrick Joseph P. Barri, Secretary
Marguerite A. Piret
David D. Tripple
Stephen K. West
John Winthrop
Investment Adviser
Pioneer Investment Management, Inc.
Custodian
Brown Brothers Harriman & Co.
Independent Public Accountants
Arthur Andersen LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Hale and Dorr LLP
Shareowner Services and Transfer Agent
Pioneering Services Corporation
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THE PIONEER FAMILY OF MUTUAL FUNDS
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For information about any Pioneer mutual fund, please contact your investment
representative, or call Pioneer at 1-800-225-6292. Ask for a free fund
information kit, which includes a fund prospectus. Please read the prospectus
carefully before you invest or send money.
Growth Funds Income Funds
United States Taxable
Pioneer Capital Growth Fund Pioneer America Income Trust
Pioneer Growth Shares Pioneer Bond Fund
Pioneer Micro-Cap Fund Pioneer Limited Maturity Bond Fund
Pioneer Mid-Cap Fund Pioneer Strategic Income Fund
Pioneer Small Company Fund
Pioneer Tax-Managed Fund Tax-Free
Pioneer Tax-Free Income Fund
International/Global Money Market Fund
Pioneer Emerging Markets Fund Pioneer Cash Reserves Fund*
Pioneer Europe Fund
Pioneer Indo-Asia Fund
Pioneer International Growth Fund
Pioneer World Equity Fund
Growth and Income Funds
Pioneer Fund
Pioneer II
Pioneer Balanced Fund
Pioneer Equity-Income Fund
Pioneer Real Estate Shares
*An investment in the Fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Fund seeks
to preserve the value of your investment at $1 per share, it is possible to
lose money by investing in the Fund.
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PROGRAMS AND SERVICES FOR PIONEER SHAREOWNERS
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Your investment professional can give you additional information on Pioneer's
programs and services. If you want to order literature on any of the following
items directly, simply call Pioneer at 1-800-225-6292.
FactFone(SM)
Our automated account information service, available to you 24 hours a day,
seven days a week. FactFone gives you a quick and easy way to check fund share
prices, yields, dividends and distributions, as well as information about your
own account. Simply call 1-800-225-4321. For specific account information, have
your 13-digit account number and four-digit personal identification number at
hand.
90-Day Reinstatement Privilege (for Class A Shares)
Enables you to reinvest all or a portion of the money you redeem from your
Pioneer account - without paying a sales charge - within 90 days of your
redemption. You have the choice of investing in any Pioneer fund, as long as
you meet its minimum investment requirement.
Investomatic Plan
An easy and convenient way for you to invest on a regular basis. All you need
to do is authorize a set amount of money to be moved out of your bank account
into the Pioneer fund of your choice. Investomatic also allows you to change
the dollar amount, frequency and investment date right over the phone. By
putting aside affordable amounts of money regularly, you can build a long-term
investment - without sacrificing your current standard of living.
Payroll Investment Program (PIP)
Lets you invest in a Pioneer fund directly through your paycheck. All that's
involved is for your employer to fill out an authorization form allowing
Pioneer to deduct from participating employees' paychecks. You specify the
dollar amount you want to invest into the Pioneer fund(s) of your choice.
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Automatic Exchange Program
A simple way to move money from one Pioneer fund to another over a period of
time. Just invest a lump sum in one fund, and select the other Pioneer funds
you wish to invest in. You choose the amounts and dates for Pioneer to sell
shares of your original fund and use the proceeds to buy shares of the other
funds you have chosen. Over time, your investment will be shifted out of the
original fund. (Automatic Exchange is available for originating accounts with a
balance of $5,000 or more.)
Directed Dividends
Lets you invest cash dividends from one Pioneer fund to an account in another
Pioneer fund with no sales charge or fee. Simply fill out the applicable
information on a Pioneer Account Options Form. (This program is available for
dividend payments only; capital gains distributions are not eligible at this
time.)
Direct Deposit
Lets you move money into your bank account using electronic funds transfer
(EFT). EFT moves your money faster than you would receive a check, eliminates
unnecessary paper and mail, and avoids lost checks. Simply fill out a Pioneer
Direct Deposit Form, giving your instructions.
Systematic Withdrawal Plan (SWP)
Lets you establish automatic withdrawals from your account at set intervals.
You decide the frequency and the day of the month you want. Pioneer will send
the proceeds by check to the address you designate, or electronically to your
bank account. You also can authorize Pioneer to make the redemptions payable to
someone else. (SWPs are available for accounts with a value of $10,000 or
more.)
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HOW TO CONTACT PIONEER
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We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
Call us for:
Account information, including existing accounts,
new accounts, prospectuses, applications
and service forms 1-800-225-6292
FactFone(SM) for automated fund yields, prices,
account information and transactions 1-800-225-4321
Retirement plans information 1-800-622-0176
Telecommunications Device for the Deaf (TDD) 1-800-225-1997
Write to us:
Pioneering Services Corporation
60 State Street
Boston, Massachusetts 02109
Our toll-free fax 1-800-225-4240
Our Internet e-mail address [email protected]
(for general questions about Pioneer only)
Visit our web site: www.pioneerfunds.com
This report must be preceded or accompanied by a current
Fund prospectus.
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